The New Mexico Spaceport Authority (NMSA) has approved borrowing $6.5 million to build a Spaceport America visitors center in Truth or Consequences. Meanwhile, Dona Ana County officials are preparing to bid out a contract to pave a southern road that leads to the remote spaceport.
However, the projects won’t measure up to the original plans for them due to funding limitations. The budget squeeze is a result of years of delay in the start of commercial operations by Spaceport America’s anchor tenant, Virgin Galactic.
Expected revenues from Sir Richard Branson’s suborbital space tourism business have not come in to fund spaceport operations and the completion of projects. The delays have left taxpayers at the local and state levels on the hook to make up the difference.
Taxpayers in Sierra and Dona Ana counties approved tax hikes to help fund Spaceport America, whose costs have no risen to just under $225 million. The counties, which are very poor, are expecting substantial economic benefits from the spaceport.
Virgin Galactic hopes to begin flights from Spaceport America by the end of the year. However, SpaceShipTwo is still undergoing tests at the Mojave Air and Space Port in California. The company’s schedule predictions have been extremely optimistic over the years.
Tourists will gather at the Truth or Consequences visitors center to take tour buses to Spaceport America. They will view exhibits in a temporary visitors center at the spaceport that will be located inside the Virgin Galactic Gateway to Space, which is a terminal and hangar facility.
Plans for an elaborate visitors center in a separate building at the spaceport have been shelved for the time being due to a lack of funds. The facility would have housed a theater, restaurant, exhibits and other amenities.
A separate visitors center that would shuttle tourists to the spaceport from the village of Hatch also has been delayed, in part due to the inability to identify a suitable site for it.
The New Mexico Spaceport Authority (NMSA) originally sought a private loan of $20 million to fund the visitors centers, but it couldn’t obtain one at a good interest rate. The authority then asked the State Legislature for $1 million to construct a temporary hangar at Spaceport America. Legislators provided a mere $115,000 — less than half the cost of a $250,000 ticket aboard Virgin Galactic’s suborbital SpaceShipTwo vehicle.
The Las Cruces Sun-News reports that NMSA will seek the loan from a state agency and that local taxpayers are likely to foot the bill for paying it back.
The New Mexico Spaceport Authority board OK’d a measure Tuesday that will allow it to seek a $6.5 million loan from the New Mexico Finance Authority. It also will have to be signed off upon by the state Board of Finance…
Spaceport authority Executive Director Christine Anderson said the agency has two options for repaying the loan: using excess revenue from two county-level sales taxes that also help repay loans used for Spaceport America construction or using revenue from a Virgin Galactic lease of spaceport facilities.
“They’re more comfortable with the excess pledged revenue,” she said, referring to finance authority officials.
Sales taxes OK’d by voters in Doña Ana and Sierra counties go to repay a portion of bonds that were taken out to build the $212 million Spaceport America, located just north of Doña Ana County. But not all of the sales-tax revenue is needed each year to repay the bonds.
The newspaper’s estimate for Spaceport America’s cost does not include the $6.5 million loan for the visitors center and another $6 million in costs for paving the 24-mile southern road to the site.
Whether the revised plan will attract many tourists remains to be seen. NMSA’s own Strategic Business Plan warns that any cutbacks in plans for the visitors centers would likely result in a poor visitor experience and fewer tourists paying money to see the high-tech spaceport. Officials are hoping to attract 200,000 visitors per year to the site.
Potentially compounding a general slowdown in demand for travel to New Mexico is the possibility of a Spaceport America visitor experience that is either under-capitalized in terms of facilities and experiential content, or more likely, not marketed well enough to attain awareness levels of 30% assumed in the demand projections. Additionally, the degree to which the local communities surrounding the spaceport are prepared to accommodate additional visitors in terms of hospitality services, infrastructure and amenities will impact the guest experience. Tourism relies on a critical mass of high quality activity and attraction to draw visitors to a particular place; if guests feel the activity failed to live up to their expectations, that there wasn’t enough to do, or that it wasn’t “worth the visit,” then poor word-of-mouth and travel website reviews will swiftly kill a new destination. More critically, guests won’t be able to evaluate a destination at all if they don’t know about it and never visit in the first place. The baseline hospitality management firm proforma requires at least 10-15% of gross revenue to be spent on marketing during the first five years of operations.
Meanwhile, Dona Ana County officials are preparing to put the first section of the southern road surfacing project out to bid. The bidding process will begin after the receipt of some additional information from the Bureau of Land Management, which oversees the property where the road will be surfaced.
The existing dirt road provides a quicker route from Las Cruces to the spaceport. Currently, visitors must drive north of the spaceport to Truth or Consequences, and then drive south again to reach the remote facility. Dona Ana county officials believe they won’t fully reap the economic benefits of the spaceport without a direct route to it.
The road project will be done in two phases and will cost $14.5 million. Even after that expenditure, officials are hoping for a smooth driving surface. Converting that surface into a full paved road will wait for a still-unfunded third phase.
After a budget cut in 2013 that was replenished this year by the Legislature, the New Mexico Spaceport Authority — in charge of paying for the southern road — has about $14.5 million for the project.
County officials said that’s not enough to build a full-fledged paved road. But as part of Phase 2 of the road project, county staff are considering two options. One entails building a road out of reclaimed asphalt millings, left over from a highway construction project that’s expected to be carried out in 2015, and the other is chip-sealing the road, a sort of basic layer of pavement.
The eventual cost of Phase 1 will play a role it determining how much can be done in the second phase, Armijo said.
Doña Ana County Commissioner Ben Rawson, who’s on a spaceport tax district board, said the first phase of construction is expected to cost about $9 million, leaving the remainder of the budget for Phase 2. But he said an eventual third phase will be needed to “really complete the road.”
Rawson said the road under current plans “won’t be a full paved road” because there’s not enough money available. Part of that is because of the mitigation costs in dealing with more than 30 archeological sites that were discovered.
The third phase will likely not be funded until revenues from Virgin Galactic’s space tourism flights begin to come in.